According to publicly available sources, at least five parties involved in sizeable transactions have recently tried to rely on a material adverse change/effect clause ("MAC") to avoid proceeding to close the transaction.  If the current financial crisis continues, it is likely that a MAC will be relied upon by parties to other transactions in the future for the same purpose.
 
Against this background, the recent Hexion v. Huntsman  decision and related precedents are of particular relevance in evaluating whether a MAC is likely to be enforced and/or how one may be structured to have the most likelihood of surviving legal challenge.

UPDATE: As expected, today Hexion filed suit in NY State Supreme Court against the Banks seeking specific performance of their obligation to fund Hexion's acquisition of Huntsman. Copies of the full Complaint and the Hexion Press Release can be downloaded above.

If you would like to know more about any of the topics mentioned above, please contact the White & Case lawyer with whom you regularly discuss these matters or any of the following lawyers:  

Eric L. Berg 
Partner
+ 1 212 819 8253

Paul Carberry
Partner
+1 212 819 8507

Owen C. Pell
Partner
+ 1 212 819 8891
 

Duane D. Wall 
Partner
+ 1 212 819 8453
 

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